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The following is a guest contributed post by Agustin Coll, Headway Digital Co-Founder and CRO.

Brands seeking to establish and grow market share in Latin America need to take a close look at programmatic. Right now, Latin America is in the midst of a programmatic boom that’s projected to continue for the next several years—a boom that is rapidly and affordably expanding access to some of the fastest-growing ad markets in the world. Here’s why programmatic is taking hold so quickly in Latin American markets and how programmatic advertising is uniquely suited to the region’s social-media and technology habits.

Programmatic poised to lead in total display spend

Programmatic represented 35% of total display spend in Latin America in 2014, according to Magna Global Intelligence, and it will command 61% of display spend by 2018. Among the region, three markets are current standouts. Brazil is Latin America’s largest ad market, with an expected 2015 total spend of $20 billion and a projected total spend in 2018 of $30 billion. In all paid advertising and in digital ads specifically, Brazil accounts for roughly half of the region’s spending. Programmatic in Brazil already accounts for roughly half of the total display spend and is expected to increase in step with regional projections.

Argentina is in the midst of an ad market expansion so powerful that it’s now the world’s fastest growing market for paid media. Total media spending is expected to grow by 23% or more year over year through at least 2018, when the total market spend will be roughly $9 billion, per eMarketer research. Digital and mobile are driving Argentina’s growth, with digital growing at 27% or more annually and mobile increasing at 80% or more each year through 2018.

Mexico is Latin America’s 2nd-largest ad market, and it’s undergoing changes. Television is still the dominant ad channel, but digital is growing and will account for an estimated $1.3 billion this year and $2.3 billion by 2018. Display accounts for more than 60% of Mexican digital ad spending, with social media and digital video growth far outpacing banner and rich media growth.

Smaller markets, such as Chile, Colombia, Ecuador and Peru, should develop quickly in the coming years as advertisers deploy the knowledge they’re developing in larger markets. In fact, Colombia’s RTB market is already on par with regional leaders Brazil and Mexico. Overall Latin American RTB is undergoing fast growth, from 7% of 2014 total display spend to a projected 23% in 2018.

Mobile users are motivating programmatic growth

Smartphone adoption rates in Latin America are part of the reason the programmatic forecast is so favorable. Over the next 3 years, Latin America will account for half of the globe’s smartphone users, up from slightly less than one quarter today. Smart advertisers are getting into mobile programmatic in Latin America in a big way. Mobile ads also offer powerful data that’s unavailable through web-based campaigns, such as real-time location data, to build more detailed and insightful profiles on consumers’ behavior.

Two other facts stand out about Latin American consumers’ smartphone use. First, some 20% of Facebook users hail from the region, and about 180 million Latin American smartphone users connect with their social media networks on their phones. Overall, more than 95% of the region’s internet users participate in at least one social network and spend about 10 hours a month on social media. The convergence of real-time, highly customized social advertising and mobile programmatic growth offers a unique opportunity to reach the consumers with the right brand messages at ideal times.

Second, Latin Americans have mobile video viewing habits unmatched by consumers any other region. Data from 2014 found that 31% of Brazilian smartphone users watch mobile video at least once a day. In Mexico, the rate was 25% and, in Argentina, 19%. Brazil’s mobile video consumers also lead the region in their preference for videos that appear on social networks, in addition to videos viewed through mobile apps and online video platforms. Mobile video is more affordable to produce and distribute than video for television and premium online channels, and the real-time customization features of mobile programmatic translate into better impact for mobile video campaigns.

The combination of overall programmatic growth, rising smartphone adoption rates, social media penetration rates, and the popularity of mobile video make it comparatively easy and affordable to reach Latin American consumers. The key is moving into the space now rather than watching from the sidelines as others capitalize on the growth trends of the next few years.

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[…] growth in smartphone penetration, and by 2019, some 57% of consumers will own one. Moreover, 95% of all Internet users are active on at least one social media site. And by 2018, programmatic marketing will account for […]

Mobile Advertising Watch is a leading technology media property dedicated to covering the rapidly evolving world of mobile advertising, reviewing new solutions, giving reliable and actionable tips and breaking important technology news.